Mattel Posts Surprise Profit in First Full Quarter Under New CEO

Toymaker Mattel Inc posted a surprise profit in its first full quarter under new chief executive Christopher Sinclair, helped by a rise in demand for its Fisher-Price toys and lower costs.

The company is in the middle of a turnaround as its Barbie dolls have fallen out of favor with young girls, who are increasingly reaching for electronic toys such as tablets and watches.

Mattel's gross margin improved to 47.9 percent in the second quarter ended June 30 as the company managed to curtail costs by nearly 10 percent.

Sales of Fisher-Price toys, aimed at infants and preschoolers, rose 9 percent in the quarter. They had fallen 17 percent in the same period a year earlier.

Barbie sales, however, continued to disappoint, falling 11 percent to $130.3 million.

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The company reported a net loss of $11.4 million, or 3 cents per share, in the quarter, compared with a profit of $28.3 million, or 8 cents per share, a year earlier.

Excluding items, Mattel earned 1 cent per share, beating the average analyst estimate of a loss of 4 cents.

Net sales fell 7 percent to $988.2 million, below the analysts' estimate of $995.4 million.

Mattel's shares closed at $25.15 on Thursday, having fallen 18.7 percent this year.

(Reporting by Nayan Das in Bengaluru; Editing by Simon Jennings)